It is fair to say that Consumer Duty introduces a more rigorous approach to consumer protection. It demands more and, at the same time, provides less direction as we move towards outcomes-based regulation.

Start with the cross-cutting rules

The Consumer Duty’s Cross-Cutting Rules require firms to act with integrity, ensuring that all actions are taken in good faith towards consumers. They must avoid causing harm, both financial and emotional, by providing clear, fair, and transparent services that meet consumers’ needs.

Firms are also obligated to ensure that their products and services consistently deliver good outcomes for consumers, regularly assessing their impact to avoid negative consequences. These rules help guide firms to prioritise the well-being of consumers, especially those in vulnerable circumstances, and ensure that all interactions are fair, honest, and supportive.

The four outcomes in Consumer Duty

The FCA also sets out four outcomes; from our experience, this has been where there has been some real focus. This is where most firms have placed their effort over the first years of the Consumer Duty.

Firms must deliver good customer outcomes across four key areas: products and services, price and value, consumer understanding, and consumer support.

Fair value – is it all about price? 

Fair value assessments are central to compliance. Lenders must demonstrate that their products and services offer fair value, meaning fees and charges must be proportionate to the benefits received. This requires careful documentation and preparation for regulatory scrutiny.

Understanding and support

The Duty also places greater emphasis on consumer understanding and support. Firms must ensure communications are clear, fair, and accessible, as well as reviewing marketing materials and customer interactions.

Additionally, firms must provide ongoing support, particularly for vulnerable customers, to ensure responsible borrowing.

Demonstrating compliance is a key challenge. The Duty requires firms to monitor and evidence good customer outcomes proactively. The way that you implement that monitoring and how you evidence progress differs from firm to firm. There are some standard features, such as the Annual Board Report.

It can be more complex when asked to evidence a culture shift. How can you demonstrate that fair treatment is embedded at every customer journey stage?

Helping you with the Consumer Duty

The CCTA offers expert guidance, training, and advocacy to help lenders navigate Consumer Duty requirements and stay ahead of regulatory changes.

Consumer Duty sets higher expectations for lenders, requiring proactive compliance and fair customer outcomes. Ensure your firm is prepared by reviewing our Consumer Duty resources, attending our upcoming webinars, or getting tailored support from our team.